Investors Withdraw $280B From U.S., Global Equities Amid Tariff Fears

U.S. investors sharply reduced their holdings in equity funds amid concerns over President Donald Trump's recently implemented tariffs, which have raised the average U.S. tariff rate to levels not seen since World War II or 1935. In the week ending August 6, equity funds experienced significant outflows totaling $13.7 billion, with large-cap funds being the most affected. Concurrently, investors sought safety by moving substantial sums into money market funds, which saw inflows exceeding $78 billion, the largest since December, alongside increased interest in bond funds. This shift reflects broader economic worries about growth prospects and corporate earnings, causing a stall in the S&P 500's upward momentum and influencing market expectations toward potential Federal Reserve rate cuts by mid-2026. Globally, equity funds also faced sell-offs, while some sectors such as communications and industrials attracted inflows, indicating selective investor confidence. Overall, the data highlights a cautious market environment driven by tariff concerns and economic uncertainty.